ATandT Sued for Allegedly Overbilling Apple iPhone, iPad Users

AT&T is reportedly facing a federal class-action suit for "systematically" overstating the data use of iPhone and iPad owners.

AT&T reportedly is facing a federal
class-action suit alleging that it
"systematically overstates the amount of data used on each data transaction
involving an iPhone or iPad," according to
the Courthouse News Service, a
site for lawyers and the media.
According to the Jan. 31 report,
the suit was filed by a Patrick Hendricks, who said that an independent
consulting firm he hired conducted a two-month study of AT&T's billing
practices for data usage and found that the system consistently overstates the
amount of data used, by 7 percent in some instances
and up to 300 percent in others.

The news site goes on to
quote Henricks' claim, which continues:

Not only does AT&T
systematically overbill for every data transaction, it also bills for phantom
data traffic when there is no actual data usage initiated by the customer. This
was discovered by the same independent consulting firm, which purchased an
iPhone from an AT&T store, immediately disabled all push notifications and
location services, confirmed that no e-mail account was configured on the phone,
closed all applications, and let the phone sit untouched for 10 days. During
this 10-day period, AT&T billed the test account for 35 data transactions
totaling 2,292 KB of usage. This is like the rigged gas pump charging you when
you never even pulled your car into the station."

The suit also claims that the overcharges, while only
modestly affecting an individual's bill, have a significant impact on
AT&T's bottom line when spread across its entire user base. During
the fourth quarter of 2010, AT&T
announced Jan. 27, it added 4.1 million iPhones to its network and increased
its wireless data revenues by $1.1 billion.
"A significant portion of those data revenues were inflated
by AT&T's rigged billing system for data transactions," states the
Hendricks suit, according to the report.
AT&T has offered no statement on the suit, though a
spokesperson for AT&T commented, "We have only recently learned of the
complaint, but I can tell you that we intend to defend ourselves vigorously.
Transparent and accurate billing is a top priority for AT&T,"
according to Computerworld.
This is hardly the first time that AT&T, in conjunction
with its Apple iPhone, has been served with a legal suit. Following the June
2010 debut of the Apple iPhone 4, and the "Antennagate"
issue that followed, AT&T and Apple were accused by Maryland residents of knowingly
selling a faulty product. Specifically, the suit accused the pair of, among
other things, general negligence, breach of warranties, deceptive trade
practices, intentional misrepresentation, negligent misrepresentation and fraud
by concealment.
In July 2010, a class-action suit focused on the
secrecy of the exclusivity agreement between AT&T and Apple, alleging
that since the two had secretly agreed that AT&T would have exclusive
rights to the iPhone for five years, consumers who had signed two-year
contracts were essentially forced into five-year agreements.
And in 2009, AT&T, AT&T Mobility and Apple were sued
for over promising and under delivering by a New Jersey man who said that his
iPhone only connected to AT&T's 3G network a fraction of the time. It
wasn't the first time that the pair had been accused
of false speed claims, as they'd already faced similar suits filed in
California in 2007 and 2008, Alabama in 2008, and Florida and Texas in 2009.
Hendricks is reportedly seeking restitution and class
damages for money had and received, breach of contract, unjust enrichment,
unfair and fraudulent business practices, unfair competition and violations to
the Federal Communications Act.

Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.